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Belt and Road Initiative
OpinionComment
Sonja Cheung
Sonja Cheung

The View | As China’s economy slows, Africa stands at a critical juncture

  • With Chinese lending to Africa shrinking, the continent must find ways to support its own development
  • It could do so by increasing internal trade, diversifying tradeable goods away from commodities and developing its relationship with the US

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An exhibitor introduces skincare products made in Africa during the second China-Africa Economic and Trade Expo in Changsha, the capital of central China’s Hunan province, on September 27, 2021. Photo: Xinhua
Sonja Cheung
We will soon usher in the Year of the Dragon, marking a unique time for expanding relationships, harnessing new ideas and moving forward, sentiments that will reverberate halfway across the world in Africa. The continent has long had robust economic ties with China, but now faces a critical juncture as the latter’s economy softens.
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Africa needs to diversify and solidify existing relationships with other global partners, including the United States, to buffer itself from China’s changing economic landscape and ensure its growth. This is also a pivotal moment for African countries to increase internal trade and diversify their tradeable goods.

China has long courted Africa, given that the continent is rich in natural resources, including oil and critical minerals, and placed the continent at the heart of its Belt and Road Initiative – a scheme in which China finances infrastructure in Africa that is largely engineered and constructed by Chinese businesses, with resource extraction by Chinese mining and energy companies.
China has footed the bill for massive projects in Africa, including providing around US$1 billion in loans at the end of 2023 to finance two new electricity-generating units in Zimbabwe’s Hwange power station, aimed at reducing power cuts in the country.
However, Beijing is now moving away from large spending sprees on the continent as China faces economic headwinds at home amid falling consumer prices, a real estate crisis and sluggish exports. As Chinese lending to Africa shrinks, there’s a stronger imperative for the continent to find ways to support its own development.

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Addis Ababa road built by Chinese company aims to ease traffic woes in Ethiopian capital

Addis Ababa road built by Chinese company aims to ease traffic woes in Ethiopian capital

A key approach would be to promote a broader range of tradeable goods outside natural resources to enhance commercial opportunities. To date, Africa concentrates on exporting natural resources such as chromium, platinum, diamonds, iron, cobalt, copper and uranium, given that it has 30 per cent of the world’s remaining mineral resources, as well as 12 per cent of the world’s oil and 8 per cent of the world’s natural gas reserves.

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